Amicus Briefs Filed In Appellate Court In Support Of Fannie Mae Plaintiffs

Amicus Briefs Filed In Appellate Court In Support Of Fannie Mae Plaintiffs

Fannie Mae

Photo by NCinDC

Amicus Briefs Filed In Appellate Court In Support Of Fannie Mae Plaintiffs by Todd Sullivan, ValuePlays

Below are Appellate Briefs filed either in support of plaintiffs or in support of maintaining Fannie Mae and Freddie Mac in the current form and eliminating their liquidation.

Play Quizzes 4

I’d expect more to come

60 Plus Association, Inc

Interest Of The Amicus Curiae

London Value Investor Conference: Joel Greenblatt On Value Investing In 2022

The first London Value Investor Conference was held in April 2012 and it has since grown to become the largest gathering of Value Investors in Europe, bringing together some of the best investors every year. At this year’s conference, held on May 19th, Simon Brewer, the former CIO of Morgan Stanley and Senior Adviser to Read More

Amicus Curiae 60 Plus Association, Inc. (“60 Plus”) is a non-partisan seniors advocacy group with a free enterprise, limited government, lower taxes approach to seniors issues. It is dedicated to educating the public about policies that help Americans of retirement age preserve and pass along to their families and to their intended charities the product of their lifelong efforts. Founded in 1992, 60 Plus now has more than 7.2 million supporters nationwide. In its advocacy on issues affecting senior citizens, 60 Plus frequently addresses subjects covered by probate law. Among these subjects are the fiduciary duties that conservators owe to conservatees. Accordingly, amicus has a direct interest in the correct application of common law principles that govern conservators.

The district court decision in this case rests on a view of the fiduciary duties of conservators that is contrary to settled common law principles, that misperceives the essential duties of trust and loyalty at the core of the conservator-conservatee relationship, and that ultimately permits the very sort of conduct by a conservator that should be and is forbidden by the common law. Because of the profound misperceptions that inform the district court opinion, 60 Plus has a keen interest in assisting this Court to discern and remedy the errors in the decision below. Given its experience in dealing with these legal issues, 60 Plus is well-suited to address the common law probate antecedents of the terms, principles and concepts that are key to the correct resolution of this case.

Introduction And Summary Of Argument

When Congress authorized the Federal Housing Finance Agency (“FHFA”), as conservator of Fannie Mae and Freddie Mac (the “Companies”), to take action to put the Companies in a “sound and solvent condition” and to “preserve and conserve” the Companies’ assets, it employed a term that has a settled, accepted meaning under common law; and, therefore, intended for the FHFA’s scope of authority to fall within the boundaries of well-established principles of conservatorships in the probate context. At the heart of these well-established conservatorship principles are duties required of a conservator, specifically 1) the duty to preserve the conservatee’s autonomy; 2) the duty of loyalty to the conservatee; and 3) the duty to preserve and conserve the conservatee’s estate by acting prudently. These duties provide key protections to conservatees, whose fundamental rights to make certain decisions for themselves have been drastically reduced, albeit for their benefit. These duties together create a strict standard by which a conservator’s actions are evaluated and deemed either within the scope of the conservator’s authority or ultra vires.

The express language used by Congress in the Housing and Economic Recovery Act (“HERA”) applies these established common law duties to FHFA in its role as conservator for the Companies. But the district court validated an action taken by the FHFA that clearly violates a conservator’s common law duties. Specifically, the FHFA exceeded the scope of its authority and violated its common law duty by entering into the Third Amendment to the Senior Preferred Stock Purchase Agreements (the “Net Worth Sweep Amendment”) with the Department of the Treasury.

By entering into the Net Worth Sweep Amendment, the FHFA violated the following duties it owes to the Companies: 1) the duty to preserve the Companies’ autonomy by acting instead to wind down the Companies; 2) the duty of loyalty by benefiting a third party (Treasury) to the detriment of the Companies; and 3) the duty to prudently preserve and conserve the conservatee’s estate by transferring all the Companies’ profits to Treasury at a time when it was well aware that the Companies were gaining financial stability.

See full PDF below.

National Black Chamber Of Commerce

In Estors Unite

Pershing Square Capital Management

Prof Jonathan R. Macey

Timothy Howard And The Coalition For Mortgage Security

Center For Individual Freedom

Independent Community Bankers Of America, The Association Of Mortgage Investors

Updated on

Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.
Previous article A First-Half Letter To Clients: Robert Shiller On The Valuation Quandary
Next article F-16 Jet And Cessna Plane Crash Over South Carolina

No posts to display


Comments are closed.